The average annual electricity consumption for a single-family house is 5000 kWh with the cost per hour extracted from their bill to be $0.17/h. you suggested a PV system that will reduce the consumption to 25% of the original consumption. The system will have initial cost after all incentives of $9,000 with zero salvage value at the end of the service life. Using 25 years analysis period and 3% interest rate, find the following for the 75% saving resulted from the new system. Use the attached excel sheet for your calculations. 1. Present worth 2. Simple payback 3. Discounted payback using the 3% rate 4. Internal rate of return

The average annual electricity consumption for a single-family house is 5000 kWh with the cost per hour extracted from their bill to be $0.17/h. you suggested a PV system that will reduce the consumption to 25% of the original consumption. The system will have initial cost after all incentives of $9,000 with zero salvage value at the end of the service life. Using 25 years analysis period and 3% interest rate, find the following for the 75% saving resulted from the new system. Use the attached excel sheet for your calculations. 1. Present worth 2. Simple payback 3. Discounted payback using the 3% rate 4. Internal rate of return

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

The average annual electricity consumption for a single-family house is 5000 kWh with the cost per hour extracted from their
bill to be $0.17 / h. you suggested a PV system that will reduce the consumption to 25% of the original consumption. The
system will have initial cost after all incentives of $9,000 with zero salvage value at the end of the service life. Using 25 years
analysis period and 3% interest rate, find the following for the 75% saving resulted from the new system. Use the attached excel
sheet for your calculations.
1. Present worth
2. Simple payback
3. Discounted payback using the 3% rate
4. Internal rate of return

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